Show Me the Stimulus…The First in a Series

February 22, 2012
By

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Just three years after President Barack Obama signed the historic American Recovery and Reinvestment Act of 2009, promising to “create” and “save” thousands of jobs in Colorado alone, many in the state still have no idea exactly how much the so-called stimulus impacted Colorado’s employment rate. Or, at the very least, determine if the touted surge in jobs ever manifested itself in a clear, undisputable, and quantifiable manner.

Reporters for Denver’s 7NEWS took a look at numbers through the second quarter of 2011 in late September last year and hit a brick wall.

According to their video report lede, “Even the state can’t say for sure.”

“And you’d think that number would be easy to find especially since the economic Recovery Act includes accountability, a way for the public to keep tabs on jobs and spending through the website, recovery.gov,” said Amanda Kost, a reporter for 7NEWS.

But tracking the money spent and the jobs, if any, created by the more than $5.6 billion in spending through the end of 2011 has proven difficult, even to those at the state responsible for keeping records.

“In fact the Colorado governor’s Recovery Act office tells me, the process is ‘tricky’ and they said they were ‘not comfortable coming up with that calculation,’” Kost told 7NEWS viewers.

The September news item examined self-reported statistics provided through June 30, 2011, when 7,849 jobs were reported, and more than $4.5 billion had been awarded.

Their estimate of per-job expense? $576,000 per job. At least 265 of the grants, loans, and contracts awarded yielded zero jobs—combined. Those private and non-governmental organizations, businesses, and government agencies received $306 million.

One final difficulty remained in gauging stimulus success: the ability to tell whether or not any of those jobs claimed in each quarter were retained for any duration of time.

The President’s Council of Economic Advisers estimated that through Q4 of 2010, the “estimated impact” of ARRA was 50,000 jobs.

Imprecise? Certainly. Satisfactory? Hardly.

National Renewable Energy Laboratory: A Case Study

One obvious question remained: has the Recovery Act produced the jobs promised, and if so, did they last?

Mere days after the 7NEWS report, the National Renewable Energy Laboratory in Golden told the Denver Post that without sustained funding extending the approximately $300 million the lab had received, they would have to cut 100-150 jobs.

As I discovered at the time, the number of jobs that NREL created as reported to recovery.org at the time they announced budget cuts in October 2011? A grant total of  219:

Blame a gridlocked Congress. Blame budget forecasts, or the “current Washington climate.”

Despite more than $298,000,000 in stimulus funds awarded as contracts or grants to the National Renewable Energy Lab–managed by the 501(c)3 Alliance for Sustainable Energy, LLC in Golden, Colorado through the second quarter of 2011, more than 100-150 jobs look to be cut as part of $8 million in budget savings.

For perspective, that $298 million was supposed to create or fund 219 jobs. Total.

Excluding the awards that did not create jobs (there were 41 awards totaling $298,026,312), the 219 NREL jobs created through stimulus grants and contracts cost approximately $1.36 million each.

Where does Colorado stand at the beginning of 2012?

Recovery.org issues quarterly updates, and through the end of Q4 2011 (the most current available report), Colorado has received $5,602,142,195 in awards, with funds received at $3,910,068,773. A total of 2,284 projects were awarded funding (1,042 contracts, 1,228 grants, and 14 loans), and the total number of jobs reported in the final three months of 2011: 4,126.22.

The jobs reported are not cumulative—awarded organizations self-report the number of jobs each quarter. Just as the 7NEWS reporters discovered, there’s no easy way to determine how many of those jobs were sustained quarter over quarter, how many were entirely “new” in creation, and how many were simply pre-existing jobs that were now funded by ARRA.

For example, in Q2 2010, the stimulus supported 17771 jobs. By Q4 2011, only 4126 jobs were funded. Individual awardees self-reported jobs funded (no designation of “created” or “saved”), often including estimates of fractional work—hence the decimal points. As we’ll see later, this is simply a rounded figure, with several awardees calculating to two decimal places.

Adding confusion to the mix, however, the individual state site for Colorado at recovery.org indicates a slightly higher figure awarded–$5,681,521,457—and 4,755 projects awarded funding. This discrepancy includes many sub-recipient awards including multi-state projects. Accounting for the difference, the number of jobs reported stays constant.

The official page for Colorado’s recovery awards does not appear to have been substantially updated since the second quarter of 2011. Their front-page estimate points to a total of $7.2 billion in Recovery Act funds, but includes ancillary benefits only indirectly linked to the Recovery Act itself.

Nice Work If You Can Get It

One particular example of a single award from ARRA, given to the City of Wheat Ridge, to complete an “Energy Assurance Plan”:

The Energy Assurance Plan process will enable better communication between local, state and federal government, first responders and the energy sector-specific critical players and officials to create a more proactive, fluid and integrated response to energy emergencies. The intent is to maintain utilities, fuels and associated energy services to the customer and to government operations with primary focus on saving lives and to greatly reduce and/or eliminate the impacts to infrastructure, property, and the environment. this [sic] new initiative will enable the city to evaluate the creation of jobs relative to monitoring, updating and evaluating the effectiveness of the Energy Assurance Plan and tracking energy emergencies.

In Q1 2011, Wheat Ridge reported 0.05 jobs created, less than 50 percent of the work completed, and spent a total of $1,139 of the total $130,000 award. The City hired a consultant on March 28, 2011 “to conduct/create Wheat Ridge’s Local Energey Assurance Plan. The City of Wheat Ridge was involved in a Jefferson county-wide emergency exercise in March which was based upon a winter storm scenario. There were 193 participants from the six participating agencies.”

By May 2011, the consultant held a two-hour meeting, and reported three hours of work, and by the end of Q3, $32,541 had been spent. By the end of December 2011, the figure of funds invoiced/received rose to $67,170. According to the report, “The consultant continues to work on the Wheat Ridge Energy Assurance Plan.” The consultant’s estimated input remains at just three hours, while staff of the City incurred “some administrative costs during this quarter.”

Either the consultant charges a rather hefty hourly rate, or that is quite a bit more than just simply some light administrative work.

This example illustrates the difficulty of calculating reliable Recovery Act figures based on self-reported results, which are, in many cases, blank or inconsistently described (changing from quarter to quarter, different estimates across different types of awardees, etc.)

The Beginning of the End

A concern for many news outlets and investigative reporters, outside of the sheer scale of the Recovery Act funding, came from the notion that calculating the impact of any particular stimulus award would be difficult due to the multi-year outlay and promises that jobs would eventually materialize. A pre-emptive report might shortchange a backloaded project that took many years to complete, for example. Many projects have already begun to sunset, as indicated in the substantial drop in reported jobs from more than 17,000 in the middle of 2010 to just over 4,000 only 18 months later.

Of the 4,755 awards in Colorado, through February 22, 2012, 2,392 have been designated as “complete.” Just three of the 14 loans have closed their activity, with the largest loan recipient—Abound Solar’s $400 million loan guarantee from the Department of Energy—still listed as “less than 50% complete.” Through Q4 2011, Abound Solar estimated 84 jobs created.

We here at The Colorado Observer will track Recovery Act awardees in Colorado over the coming weeks. We’ll scrutinize projects large and small, from all over the state.

Because we deserve to know, and because it’s our money.

Comments made by visitors are not representative of The Colorado Observer staff.

One Response to Show Me the Stimulus…The First in a Series

  1. Annchovie
    February 22, 2012 at 4:31 pm

    Speechless.

    We’ve become a country run by criminals. How can anyone be proud to be American any longer when we see this type of theft right in front of our eyes? And nobody will do anything to stop it. We’re doomed.

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